Pax‐5, a member of the paired domain family of transcription factors, is a key regulator of B lymphocyte‐specific transcription and differentiation. A major target of Pax‐5‐mediated activation is the mb‐1 gene, which encodes the essential transmembrane signaling protein Ig‐α. Pax‐5 recruits three members of the Ets family of transcription factors: Ets‐1, Fli‐1 and GABPα (with GABPβ1), to assemble ternary complexes on the mb‐1 promoter in vitro. Using the Pax‐5:Ets‐1:DNA crystal structure as a guide, we defined amino acid requirements for transcriptional activation of endogenous mb‐1 genes using a novel cell‐based assay. Mutations in the β‐hairpin/β‐turn of the DNA‐binding domain of Pax‐5 demonstrated its importance for DNA sequence recognition and activation of mb‐1 transcription. Mutations of amino acids contacting Ets‐1 in the crystal structure reduced or blocked mb‐1 promoter activation. One of these mutations, Q22A, resulted in greatly reduced mb‐1 gene transcript levels, concurrent with the loss of its ability to recruit Fli‐1 to bind the promoter in vitro. In contrast, the mutation had no effect on recruitment of the related Ets protein GABPα (with GABPβ1). These data further define requirements for Pax‐5 function in vivo and reveal the complexity of interactions required for cooperative partnerships between transcription factors.